RICS are wrong – solar panels do deliver
Wednesday, 3rd September 2008:
Contrary to the Independent’s story this morning, the length of time solar photovoltaic (PV) panels take to payback is actually only around thirteen years. The claim made by The Royal Institute of Chartered Surveyors (RICS) on the supposed 50 year plus pay-back of solar photovoltaic (PV) panels is based on outdated, misleading and inaccurate information.
Solarcentury, the UK's leading solar energy company states that in addition to the shorter payback time, the RICS figures do not take account the other benefits such as:
• The value that solar installations add to the property (typically 10%) in a struggling property market
• The chance to generate your own electricity, save on bills and sell the surplus back to your energy supplier in an increasingly energy insecure environment
Solarcentury agrees that investing in basic energy efficiency measures and solar technologies is not an either/or choice. Households should attend to the less expensive basics such as low energy lighting and loft insulation. But having done that, further significant returns and CO2 savings can be made through the retrofit installation of solar PV.
Given the urgency of the climate change challenge, and the UKs stretching renewable energy targets, we are not going to help the environment, guarantee energy security, or ultimately save money simply by adopting basic energy efficiency measures alone. If it were that simple, 40 years of energy efficiency education programmes might have had a greater impact.
Jeremy Leggett, Executive Chairman, Solarcentury says: "We are very disappointed by the irresponsibility of RICS on this issue. It simply isn't helpful to be issuing inaccurate information on the cost of solar when a clear and informed debate is vital. Solar is not only an intelligent, reliable and long lasting technology but makes financial sense both from return on investment and 'payback' perspectives, especially in this age of increasing energy insecurity. RICS calculations completely omit to consider return on investment, when technically solar on your roof gives you better returns than leaving your money in a bank account. Furthermore, their figures do not assume any rise in energy prices, when a conservative estimate of 10 per cent a year would transform the calculations."
How RICS got it wrong
To use an example, a typical domestic retrofit system saves over a tonne of CO2 per year and £350 per year off electricity bills at today's prices. The system is warranted for another 20 years and will last another 20 years beyond that. Right now, solar installers are offering retrofit PV systems with a "payback" of 13 years, not the 100 years quoted by RICS. That figure will drop further with future electricity inflation and falling solar PV costs. In addition, the Government's grant programme offers guaranteed domestic PV grants of up to £2500 till mid 2010 towards the cost of installation (see www.lowcarbonbuildings.co.uk) For solar hot water, the RICS research assumption peddled as "fact" of annual energy savings of just £24 and a 208 year "payback" is simply incorrect.
Only this week, the many micro-generating customers of Scottish and Southern Energy received the news that from 1st September they will be paid 20p per unit for their exported electricity. This means that the typical UK domestic PV owner will be saving well over £350 per year on their electricity bills at today's prices. On this basis, a typical domestic PV system will pay back in about 13 years. On top of that the value of their property will have increased as a result of their decision to install PV.
Additionally, the supposed 30 year working lifetime of photovoltaics is very much an underestimate. Some of the first solar panels manufactured by Sharp and installed in Japan over 40 years ago are still generating electricity today. And that's using half century old technology. Just because a solar panel has a warranty of 25 years doesn't mean that should be taken as an indication of its lifetime. Nobody would expect their fridge to pack up after two or three years, just because that's the warranty period. For that matter, you wouldn't talk about payback when investing in a fridge either.